United Arab Emirates News

Dubai’s Off-Plan Property Market Witnesses Remarkable Surge in Interest

The off-plan property market in Dubai is currently experiencing a substantial upswing in investor and end-user interest, according to property market consultants. This surge, characterized by a 40 to 60 percent increase in both foreign and local property buyers, points to a favorable environment for real estate investment in the emirate.

Analysts at Betterhomes note that the off-plan property market has witnessed an impressive 35 percent surge in demand over the past three months compared to the same period last year. Additionally, off-plan transactions now constitute a significant 61 percent share of Dubai’s overall real estate market.

During the second quarter of this year, Dubai recorded off-plan transactions totaling Dh34 billion, a staggering 750 percent increase from the Dh4 billion deals registered in the corresponding period in 2020. This marks a notable increase of approximately Dh30 billion in transactions over the course of three years, as reported by Zazen Properties.

A recent report from Property Monitor reveals that as of August this year, off-plan sales have claimed the highest market share, representing 64.7 percent of the market. The total volume of sales transactions has risen by 8.1 percent month-on-month, reaching a total of 12,134 sales, marking the highest volume ever for the month of August.

Property market experts assert that the current market presents an opportune moment to invest in off-plan properties for several reasons. Firstly, rising mortgage rates have altered the feasibility of purchasing ready properties for investment purposes. Despite increased rental yields, servicing a mortgage has become more costly, resulting in diminished net yields. Secondly, off-plan investments provide an advantage by allowing investors to allocate funds towards properties still available at their original prices. The flexibility of payment plans mitigates the impact of high lending rates. Lastly, Dubai’s population growth remains a crucial driver of demand for residential properties.

The report from Betterhomes emphasizes that with Dubai’s ongoing development and the steady increase in population, off-plan properties hold significant potential for appreciation in value by the time of completion. Buying off-plan properties allows investors to acquire a property at a lower price compared to completed units. Additionally, off-plan properties typically offer flexible payment plans, which can be advantageous for investors.

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